Africa Re to Develop Agricultural Insurance in Nigeria

Africa Re, the leading reinsurance company in Africa, announced that it has signed an agreement with IFC, a member of the World Bank Group to help insurance companies in Nigeria develop innovative agricultural insurance products for small holder farmers.

Under this agreement, Africa Re will work with IFC’s Global Index Insurance Facility to provide technical support to insurance companies who are licensed to underwrite index insurance products, helping them develop their agricultural insurance business line. Index-based agricultural insurance, which pays out on the basis of transparent parameters like rainfall and does not require costly field visits to verify losses, provides an innovative and more efficient solution for small holder farmers to protect their crops against losses. This initiative will also engender financial inclusion of the small holder farmers.

“60 percent of Nigerians rely on agriculture for their livelihood. Affordable and accessible risk management tools like index insurance are needed to help farmers mitigate the effects of climate-related shocks, protecting them against catastrophic losses and unlocking access to finance.” – IFC Country Manager for Nigeria, Eme Essien.

The technical support provided to insurance companies in Nigeria will include specialized product design and developing digital platforms that will enable a prospective policyholder to view index insurance products on offer, compare different products from various insurers, review the term sheet and documentation, and select their preferred policy. The aim of this agreement is to provide thousands of farmers with access to insurance by the end of 2020.